Author: India Writes Network

It’s China’s moment as BRICS Bank gets ready for launch

- by India Writes Network

It seems to be a golden period for China with yet another non-Bretton Woods institution challenging the West-dominated international financial institutions which have controlled the global financial system post 1945. Two days after 50 countries signed on to become members of the China-led Asian Infrastructure Investment Bank, the Chinese Parliament has ratified the creation of the New Development Bank of BRICS countries. The parliaments of India and Russia have already ratified the NDB, which will be headquartered in Shanghai, and will have an Indian as the CEO of the newly created institution.
With the setting up of these two banks, China has scored a point against the US and the West which have been ignoring the BRICS’ appeal for greater voting rights in the IMF and reform of global financial governance system. The NDB’s shareholding is on an equitable basis, with China, India, Brazil and South Africa contributing 20 per cent of the start-up capital of $50 billion, with a goal to reach a capitalization of US$100 billion.
The formal launch of NDB and AIIB is set to recast global financial landscape. Some will contend that 2015 seems to be the year of China when it became a game changer by hosting two new multilateral banks of the global South.

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India set to get inside SCO tent, focus on terror

- by India Writes Network

Russia will be hosting the twin summits at Ufa – BRICS and SCO – on July 8-9. It’s expected to be a big moment for Russia as Moscow, reeling under Western sanctions on account of its Ukraine actions, signals to the world that it still has friends and partners across a wide swathe of the developing world.
For India, too, the Ufa summit will be a milestone of sorts, albeit for different reasons. The long wait has ended: New Delhi is expected to be elevated from an observer to full-fledged member in this Eurasian organization. The induction of the world’s largest democracy and Asia’s third largest economy is expected to provide more heft to the grouping which has been dominated by Russia and China since its founding more than a decade ago.
Many initiatives and ideas will be competing for attention of leaders at the SCO summit in Ufa. The SCO countries are expected to forge closer regional cooperation in combating terrorism and taking on the Islamic State. Most important, the world will be watching the big picture as the SCO summit endorses a blueprint for development of the organization.

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Will Greece debt crisis impact India?

- by India Writes Network

The rejection a Greek government call to extend its bailout by EU finance ministers has deepened gloom in the Eurozone. If Greece fails to repay the International Monetary Fund (IMF) 1.6 billion euro, Greece could risk leaving the euro.
Since the European Union economy with 28 countries is India’s largest trading partner, a lot of concerns have been raised. It is possible that the Indian markets in the short term may witness capital outflows but the crisis does not have a direct impact on India since India’s exposure to these markets is limited. India’s reliance on foreign funding is also low for the region as the Central Bank’s strong foreign currency reserves built in the run up to a scare of the balance of payments scenario in 2013 have helped strengthen the economy. With the Indian economy fundamentally strong and resilient, India in 2015 is in a much better position to withstand the magnitude of the crisis in Eurozone, thereby reducing any kind of panic and chaos which could otherwise have deterred investors.

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India second largest shareholder in China-led AIIB, hopes for infra boost

- by India Writes Network

Moving beyond the construction of rivalry between the two Asian giants, India has emerged as the second largest shareholder in the China-led Asian Infrastructure Investment Bank (AIIB), which is expected to provide development finance to Asia’s third largest economy which needs at least $1 trillion to bolster its infrastructure.

The 60-article agreement specifies structure and policy-making mechanism, as well as its member’s shares in the bank. The AIIB will have authorized capital of $100 billion, with Asian countries contributing up to 75 per cent of the total capital.

The delegates from 50 member countries gathered at the majestic Great Hall of the People in Beijing on June 29 to sign an agreement, providing the legal framework for the China-led Asian Infrastructure Investment Bank (AIIB), which is seen as a rival to the world’s major financial institutions, including the World Bank and Asian Development Bank.

Seven more countries are due to sign by the end of the year. For India, its ambassador to China Ashok Kantha signed the document.

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